Leeches and their fellow travellers

If I was quiet recently, it’s not because I really was. I’ve been chairman at a conference on eGovernment, at that grand cultural icon of South Africa, Emperor’s Palace. If you haven’t been there, think Orlando, Florida, but without the sophisticated style and elegance.

Here’s a thought that struck me, about the love for unions among government employees. One speaker, on the use of artificial intelligence in decision support, suggested that if a machine can be coaxed to do something, it can do it better than humans. “Woah,” responded the audience. Not because of some Gödel, Escher, Bach inspired philosophical disagreement about the nature of intelligence and consciousness, but because this sounded far too much like that evil capitalist anti-employment plot, automation. Another presenter spoke of the value of self-service technology. Not only would it improve, he said, the citizen’s experience of government service delivery by giving them a choice of channels, or improve the efficiency and cost-effectiveness of service bureaucracies especially at local government level. It would also benefit those who don’t have access to the requisite technology for alternative channels (such as internet access or even a mobile phone), because pressure is taken off the call centres and walk-in government service offices.  Again: but what about jobs?

I wrote a column for Maverick magazine on the similarity between ANC economic policy and that of the Apartheid government. This is another symptom.

In our racist past, almost half the total white population was employed by the state, despite the fact that the civil service considered 80% of the population too uncivilised to be served. At school in the 1980s, it was a common perception that if you couldn’t crack it as, say, a bank clerk, you’d have no problem getting work at the post office or railways. Huge suburbs of subsidised housing consisted almost entirely of civil servants.

It isn’t at all a necessary implication, but let’s assume for argument’s sake that jobs will be lost in pursuit of efficiency and saving taxpayers money. Since the state sees itself as an agent for social upliftment, it is obviously under great pressure not to be seen to contribute to our high unemployment rate. Therefore, it is under pressure from unions, assorted socialists and many of its own employees not to improve efficiency.

Protecting jobs isn’t in itself problematic, of course, and certainly the intent is good. However, if a job costs the economy more than it’s worth, doing so is counter-productive. It destroys jobs somewhere else. It saps economic growth. If you’re going to do something about our country’s very serious structural unemployment problem, you need to create productive jobs. Only if a job adds to the productivity of the country — which technically no government job does, but certainly no unnecessary government job does — can profit be made, some of which will be re-invested in new business, which creates new jobs.

So in reality, by protecting civil service jobs that do not contribute to efficiency, government at best prevents new job creation, if it doesn’t actually destroy jobs elsewhere in the economy. It worsens structural unemployment, which is the exact opposite of the policy goal.

Many people point, with some justification, to the need for labour legislation to protect the “rights” of employees. In fact, what those growth-deadening laws impose aren’t rights, and employees would be able to exercise their own market power in a fully employed market. So perpetuating our 25 % unemployment rate (to use conservative numbers) unemployment isn’t going to help create circumstances for increasing labour market flexibility.

By reacting in a simplistic, knee-jerk fashion, unions, civil servants and fellow travellers fail not only those they claim to represent, but also the millions of unemployed. It would help if they would exhibit at least an occasional grasp of elementary economics.